Interior Secretary Ken Salazar Signs the First Lease for Commercial Wind Energy Development on the Outer Continental Shelf

by Troutman Sanders LLP

On October 6, 2010, Secretary Salazar and Cape Wind Associates, LLC signed the first lease for commercial wind energy development on the Outer Continental Shelf (“OCS”), the Cape Wind Project. The Cape Wind Project has 130 planned wind turbines which could then create up to 468 megawatts, with an average output of 182 megawatts. The Cape Wind Project could power over 200,000 homes in Massachusetts, roughly 75 percent of electricity demand in Cape Cod, Martha’s Vineyard, and Nantucket Island. The lease for the Cape Wind Project is for 28 years and will cost Cape Wind Associates a 2 to 7 percent operating fee while in production which equals $88,278 a year.

Secretary Salazar stated that the Department of the Interior expects to identify high priority areas for wind development by the end of 2010 and then work to develop a transmission system in the Atlantic Ocean. Also, Secretary Salazar praised Cape Wind for being a “pioneer for offshore wind development in the U.S.” and stated that the lessons learned from this approval process would help the U.S. move forward with off-shore wind development. Secretary Salazar also stated that permitting time for offshore wind projects could be cut down, and to help shorten the permitting process he created the Atlantic Offshore Wind Energy Consortium earlier this year. The new consortium will coordinate with the Department of Energy, and it will also include eleven governors and eight state task forces.